Mumbai, India (CNN) -- Cramped, self-made huts line stretches of narrow and dirty lanes, accompanied by the smell of open sewers and towers of garbage. Welcome to Dharavi, one of the largest slums in the world.

Spread across nearly two square kilometers in the heart of Mumbai, India's economic capital, Dharavi is home to between 500,000 and 1 million of the city's poorest inhabitants.

But the slum, which was made famous after parts of the movie "Slumdog Millionaire" were filmed there, may not exist for much longer.

The bustling shantytown's prime location in Mumbai -- where rents are among the highest in India -- has led to controversial proposals to dramatically redevelop the area.

For years, the regional government has been planning redevelopment of the area, in an apparent effort to emulate the likes of Shanghai, which China transformed into a skyscraper metropolis during the economic boom of the 1990s.

According to proposals drawn up by U.S.-trained architect Mukesh Mehta, the redeveloped Dharavi will have gardens, clinics, schools, shops and space for residents to run small businesses.

The town's new design will include free accommodation for many of its current inhabitants which, argues Mehta, will not only benefit them but India's economy as a whole.

"If 33% of (the) urban population lives in slums -- they may live in sub-human conditions, but still, they are a drain on the economy," he said. "Tomorrow they start becoming contributors to the economy."

However, some local residents and charities argue that Dharavi's redevelopment will harm the community and shortchange the thousands of small businesses that operate there.

"It's not people centric. The entire plan is based on the fact that land is going to be released, which is going to be sold for profit by the developer," said Vinod Shetty of community-based non-profit organization ACORN India.

At present, Dharavi has a large number of thriving small-scale industries that produce embroidered garments, export quality leather goods, pottery and plastic.

These, in conjunction with a booming and innovative recycling industry that helps turn around the discarded waste of Mumbai's 21 million residents, form a productive but often "informal" sector that many fear will be lost when the redevelopment is complete.

Supporters of Dharavi's self-organized and ramshackle system come in surprising shapes and sizes.

Speaking to his Foundation for the Built Environment at a conference in 2009, Britain's Prince Charles said that the district's use of local materials for housing and employment added up to "an underlying intuitive grammar of design that is totally absent from the faceless slab blocks that are still being built around the world to 'warehouse' the poor."

But, for Dharavi's detractors, the shantytown is an eyesore on an aspiring city.

The revamp will "definitely help my business," said one garment exporter who works and lives in the slum. When Dharavi is fixed up, "more buyers will come to my workshop," he said.